Mobile telcos pressure fixed-line rivals

Subscriber numbers on the up-and-up

Common Topics

The number of global mobile phone subscribers will reach nearly two billion by the end of 2005, although most voice calls will still be made by landline, according to a new telecom trends forecast issued by Deloitte's Technology, Media and Telecommunications (TMT) Group.

Deloitte predicts that mobile subscriber growth will continue to rise this year with demand being fuelled by developing countries in Asia and Latin America. The research also suggests that mobile penetration will surpass 100 percent in some developed markets as customers take out second subscriptions for data or for personal use.

Voice will continue to be the primary source of revenues and profits for mobile operators throughout the year, accounting for more than 80 per cent of total revenue on average. Deloitte forecasts that voice volumes will continue to grow during 2005 due to ease of use and falling prices.

With the move towards second subscriptions, mobile operators will begin to re-structure current bill plans to include new services such as automatic line switching, multiple voicemail accounts and separate billing. Deloitte also predicts that the most compelling and lucrative mobile content will continue to revolve around phone personalisation, such as ringtones, wallpapers and games.

Although, mobile subscriber numbers are set to skyrocket, the vast majority of voice calls made in 2005 will still originate and terminate on the PSTN (Public Switched Telephony Network) due to superior call quality and overall reliability. However, telecom operators will be forced into reducing prices in response to competition from mobile operators and VoIP providers. For its part, Deloitte recommends that fixed-line operators focus on full-featured phones that have key convenience features such as conference calling and text messaging in order to stimulate call volume over fixed-lines

Although VoIP adoption is expected to rise during the year, Deloitte expects it to remain a niche product with growth limited by shortfalls in quality, consistency and reliability. The company believes that these problems will lead firms to opt for a hybrid approach, using VoIP for internal communications and the PSTN for external traffic.

In terms of internet technologies, Deloitte predicts that broadband penetration will continue to grow in 2005, with high-speed connections finally outnumbering dial-up in many countries. Broadband use will continue to revolve around PC applications however; newer appliances such as videophones, networked gaming consoles and home security devices launched during the year.

Deloitte's study also forecasts that 2005 will be the year when RFID (Radio Frequency Identification) finally makes it out of the lab and into the commercial world. The company says that major retail chains, defence contractors, automotive manufacturers and others are now demanding that suppliers use the miniscule microchips and this is expected to fuel a massive increase in RFID adoption with the production of RDID tags expected to mark the start of another major wireless revenue stream.